Waste Management Inc. invests in alternative energy aimed at converting solid waste into chemicals and energy

Analyst Commentary, Matthew Bovencamp: Waste Management Inc. (WM) has invested in 8 alternative energy companies focused on converting municipal solid waste into chemicals and energy. Waste management currently has 17 waste-to-energy plants and captures methane from 131 landfill facilities. The waste-to-energy plants allow the company to convert, through incinerating the garbage, 7.1% of collected trash to electricity. The alternative energy companies that WM has invested in are developing methods to convert waste into other valuable products such as waste plastic to synthetic oil, waste to ethanol and waste to chemicals. Converting waste to chemicals and fuel not only reduces the pressure on the limited supply of landfills but also generates attractive revenue sources for waste collectors.

Waste Management believes it can generate $40 billion in revenue a year by converting their collected waste to fuel and chemicals. In FY2011, Waste Management had $13.4 billion in revenue, of which, $1.58 billion was from incinerating trash to produce electricity and recycling. The economic, environment and practical incentives are all in place for alternative energy to be commercially successful. We are very optimistic about the prospects of alternative energy due to the current incentives and abundant sources of inputs. 

Source: Bloomberg (Apr 3), Kapitall Wire (Apr 9)
 

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